Simply put, as Citi noted, unless Fed head Janet Yellen goes full-dovish, risk assets face tremendous downside potential. As ConvergEx's Nick Colas notes, Yellen receives a "B" grade from financial professionals, fewer than half (49%) of those surveyed approve of the job the Federal Reserve is doing. A clear majority (59%) of respondents describe the Fed as being "behind the curve" with respect to interest rates. Despite better-than-expected data whereever one looks in the US (apart from wages and housing), any hint of seni-dovish, or contingent dovish... or heaven forbid hawkish comments and the massive consensus trade that the Yellen Put has an ever-increasing strike price will fall rapidly by the wayside... though Draghi could come in later and save the day. With S&P so close to 2000, we suspect any hint of word 'slack' and algos will run stops and USDJPY will break 104.

Chair to provide us with an updated assessment on the infamous ‘Yellen dashboard’ in evaluating the ongoing labour market slack and how they have yet to normalise relative to 2002-2007 levels. Some of these alternative measures she monitors include duration of unemployment, quit rate in JOLTS data, labour force participation etc. Any sound bite that touches on the debate of cyclical versus structural drivers of labour force participation will also be closely followed. Unlike some of the previous Jackson Hole symposiums, this is likely not one that will serve as a precursor of any monetary policy changes but the tone of Yellen's speech may still have a market impact and set the mood for busier times ahead in September. Given markets are seemingly expecting nothing but another dovish display from Yellen the risk is perhaps skewed to the other side.

And ConvergEx shows even the pros are in doubt...

ConvergEx Group Survey Finds Less Than Half of Respondents Approve of Job the Fed is Doing

Two-Thirds of Respondents Say Central Bank Has Too Much Influence On Markets

Financial Professionals Name Paul Volcker As Best Federal Reserve Chairman Of All Time

"The financial industry likes Janet Yellen but believes she leads a central bank that is overexposed and behind the curve," said Nicholas Colas, ConvergEx Group chief market strategist. "There's tangible fear among investment professionals about the unwinding of Quantitative Easing and the painful increases in rates that will follow. Our survey shows that Ms. Yellen is seen as a strong leader, and investors don't want to scrap the structure of the Fed, but there is real concern about what happens next."

‘Full dovish’ means moving the goal posts on the targets. Keeping the current targets, even accompanied by rhetoric and optimism, is hawkish because it suggests that normalization is coming as well get closer to the targets.There are three ways by which Yellen can express dovishness, but only one that breaks new ground:

i) Full dovish

1) Argue that the natural rate is less than 5 ¼ - 5 ½ %

2) Advocate for a temporary overshoot of the inflation target

3) Emphasize the uncertainty around NAIRU estimates that tightening can wait till there is real evidence of accelerating inflation.

1) Make the case that there is no sustained inflation likely without accelerating wage growth and there is little broad evidence for such a pickup, but keep existing inflation and unemployment targets

2) Introduce a new labor market indicator that captures the slack she feels that the unemployment rate misses, but again keep to existing targets

iii) Contingent dovish

1) Forecasting a pickup in productivity and labor force participation that will limit the need for tightening

Full dovish goes beyond anything she has stated explicitly in her comments. It would give stimulus more room on unemployment, inflation or both, and lead to yields dropping even further, taking the USD with them. There are straightforward arguments to justify full dovish, but the Chair has not advocated any of them so far, so it would clearly plant her among the most committed doves.

Semi dovish may generate a strong initial market reaction if it looks as if it is introducing new factors into the policy equation but is much more ambiguous. 'Low wages imply low inflation' is a property of most inflation models but much weaker than saying that wage growth is now a target. Were inflation to pick up for others reasons the Fed would still tighten, even if wages remained soft. Similarly it is unclear what it means to say that the unemployment rate understates slack, but 5 ¼ - 5 ½% is the target anyway. While we would focus on whether the goalposts are being shifted, semi dovish can sound very dovish until it becomes clear whether there is any functional shift in the FOMC’s goals.

Contingent dovish is the argument she has put forward for a long time. It sounds more dovish than it is because no one has a real handle on the drivers of trend productivity growth and the US supply side has disappointed badly. Both the participation rate and productivity growth are at weak levels and there is no compelling case that either will pick up. The safest assumption is that trend productivity growth over the next three years is what it was the last three years, and that participation rates are unlikely to surge.

* * *

Were she simply to say that the targets are the targets and they will begin to reduce stimulus as they are approached, it would be a tremendous let down and viewed as very hawkish versus expectations.

Asset purchases to go to zero in one month. And, oh, by the way, Belgium to continue buying at 80 billion a month, for the forseeable future. Just a coincidence, really. No idea where Belgium gets that kind of money. Must be the chocolate. But anyway, that's the plan.

Well Obama already said that he's backing Indian Chief Warren. She's already setting up the BS meme that she will fix the Banking system, kinda like Obama fixed the Healthcare system. If there is any progressive that's even more full of shit than Barry, it's Warren.

What? She's lifetime CIA, and her supporters despise Obummer for the last selection, so she already has a support base to put any other candidate to shame.

As for the elite, they are only interested in who can fool the greater amount of the sheeple, hence her having to stand-down the last time, as the Magic Negro mesmerized the world. Otherwise, they could give two fucks as to who holds the office, just as long as POTUS can provide plausible cover for their activities.

The idea that she is toast is red/blue team fodder for the upcoming horse race. It also protects her from attacks on her record/character for as long as possible (which is her only real danger concerning the sheeple).

When does the part happen where everything drops and they buy up property at pennies on the dollar? Too bad life isn't like Trading Places and we could have Eddie Murphy yell something about the orange crop on the trading floor and mess up all their plans.

I know how my local community works, I try to trade in assets that are not FRN's I have a mutual understanding with the person I am dealing with and build a trust with them, THAT is what is coming soon to a city\town near you.

now for the markets. the fed must be buying like crazy cause up it starts. I really don't get it but a 12 the pentagon talks. wonder if we bomb Syria today. ISIS threatens to deliver another body. how PM are down is beyond me but 12:00 will tell

all I got from Janet's comments is: "my hair is white...am a bit over-weight and my slacks are black" ....and we waited a week for this crap....lolll....I think that the next time the guillotines are brought back, the condemned ought to be facing upwards!

The linkage of monetary policy to jobs is suspect in my view. The only clear effect of excessively easy monetary policy is to create excessive asset price inflation which, once overvalued, becomes a source of risk to jobs and economy in and of itself.

That's true for this administration, the big question is the next. Although, Europe is in a bad situation, one day Germany will say enough and half of europe will be without a lifeboat. That could be sooner than the admin change in 2 years.

But you are right, its all about what the white house wants right now, doing God's work.

S&P 2000 essentially matches the rise from the 1980s to 2000 bubble peak off the 2009 lows. The 2008 peak matched the 2000 bubble.

Since the markets don't trade based on any real business metric, theymust trade on chart bullshit amd mathematical formulas.

The market hit a bubble high in 2000, retested that high in 2008, then went on a relentless surge to test a new high based on the 20ish year bull market from 82-2000.

Needless to say that the algos squeezed 20 years of market growth into 6, but that is what happens when the Fed feeds the market with fake money. We also got 20 years of inflation squeezed into six.

Looking at a chart without any care for real economic analysis, the market needs a huge drop to the 2009 lows or below to set up another massive run.

Since the algos have already ran through the 1980-2000 bull market the programs will need to pull back to find another massive run to pattern after. The other massive bull market in the pattern is the post WWII run, which would perhaps put the next top around 6000ish.

Its bullshit, but that is the market. With the computers running the show you could expect the next crash to only last six months and run 5500 points in two years. Wouldn't be any less fake or manipulated than the current market.

"Looking at a chart without any care for real economic analysis, the market needs a huge drop to the 2009 lows or below to set up another massive run."

My, my,,, THAT would 'be so, #1', IF,,,IF,,, the charts weren't running on a 'mathamatical formula'. So your conclusions are in 'error'. Sounds good tho if you were on TEEVEE... lol. They are totally clueless, like most traders.

Congress should raise the minimum wage effectively generating sufficient tax revenues to significantly lessen the amount of support required by monitary policies without punishing large corporations who have most of their employees offshore and who contribute the vast amount of pollitical financiing.

It's estimated that only %5 of the previous LTRO was actually used by European banks for loans to businesses. Banks used the money to fund carry related activities and buy bonds. This 'Targeted-LTRO' doesn't make banks pay penalties for the same investing schemes. It just makes them pay back the money sooner if they don't reach certain lending threshholds by a certain time. It's just more gasoline for the bond and equity market fire.

The European banks still have not been recapitalized after the GFC, and Europe has little quality collateral. I seriously doubt Draghi will make any major policy shifts, and will JAWBONE us to death. Additionally, the ECB seems to have the Euro(rise) under control for now.

Under-use of labor resources. Why? Because of Fed policy. Rates should have never hit 0% and they certainly should have been raised years ago. Of course that would mean hookers and blow wouldn't be every night for the bankers and D.C. And then the U.S. government would have to cut spending dramatically to service their debt.

if the fed lies about EVERYTHING maybe they are lying about asset buying ending.

they could either 1) simply change to QE4 in november
or 2) engage in shadow asset purchasing through shadow channels. perhaps a myseterous buyer in brussels will buy 80 billion a month, essentially some slush fund covered up so the fed can pump the market indefinitely

the annoying voiced peter schiff is only right about one thing, that in the long run they can never stop printing. and, i will add, if and when they stop in the short run, they will make money from that too.